IMF approves $1.2 billion Extended Fund Facility Program for Jordan’s economic stability

Jordan
Photo: Petra

The Executive Board of the International Monetary Fund (IMF) has given the green light to Jordan's new $1.2-billion Extended Fund Facility (EFF) program following experl-level negotiations in November of the previous year. The program will extend through 2028, Petra reports. 

In a statement on Thursday, Finance Minister Mohammad Al-Ississ underscored the strategic importance of the program for the country, noting that the collaborative effort involved various ministries and specialized institutions in its preparation.

The program's goals encompass sustaining financial stability, elevating economic growth by enhancing national economic competitiveness, and supporting exports to alleviate unemployment by generating job opportunities. Furthermore, there is a focus on expanding social protection measures.

He stressed that the government has reaffirmed its commitment to combatting tax evasion and avoidance, emphasizing the pursuit of tax fairness and increased general revenues without imposing additional tax burdens on citizens. He noted that the program does not entail any tax increases or the introduction of new ones.

Governor of the Central Bank of Jordan, Adel Al-Sharkas, affirmed that the new EFF program will play a pivotal role in maintaining the reform momentum, strengthening the national economy's resilience, and increasing its flexibility in the face of economic shocks.

He assured that the Central Bank remains steadfast in its commitment to upholding monetary and banking stability within the Kingdom. This includes adherence to the fixed exchange rate policy against the US dollar, a policy that has proven effective over the last three decades.

Efforts are also directed towards advancing financial services digitization, expanding financial inclusion, and improving the insurance sector in alignment with global best practices. Furthermore, the Central Bank is dedicated to enhancing anti-money laundering and counter-terrorism financing systems.

An IMF statement underscored that the program aims to support Jordan's financial and monetary reform initiatives. The economic team of Jordan engaged in direct negotiations with the IMF to structure a comprehensive package of structural reforms aligned with the priorities of the economic modernization vision encapsulated in the new Extended Fund Facility program.

"Based on Jordan's robust performance under the previous program, the new EFF agreement is expected to bolster the authorities' efforts in maintaining overall stability, fortifying resilience, and expediting the implementation of structural reforms to achieve a more robust and inclusive growth trajectory for job creation," the statement added.

This new program serves as a continuation of the initiative launched by Jordan in 2020 with the IMF, which successfully completed six reviews and satisfied the requirements of the seventh review before transitioning to the current program.

Notably, the 2020 program empowered Jordan's national economy to navigate regional and global challenges over the past four years, showcasing the nation's financial and monetary stability. Jordan managed to withstand inflationary pressures experienced by other economies, maintaining stability and progressing in international credit rating agencies' rankings.

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